Brazilian DMA Fights Formation of Umbrella Organization

SAO PAULO - The Brazilian Direct Marketing Association, ABEMD, is in disarray as it battles two other DM groups and resists formation of an umbrella organization to represent the industry at home and abroad.

ABT, Brazil's telemarketing group, and IDBM, the Institute for Database Marketing, last month announced the formation of a new federation, FEBAMDI, to bring all direct marketing, including Web-based marketing, into one association.

The move brought a long-simmering dispute among Brazilian direct marketers into the open. Critics argued that ABEMD was mail-driven and not interested in pushing development of the new media.

A close election two years ago left the old leadership of ABEMD in charge and the losers bitter and resentful at what they charged was the organization's failure to keep up with the times.

Opponents lobbied hard against the incumbents, decreasing membership. The exodus was also fueled by ABEMD's money problems that arose from what Harte Hanks Brazil CEO Silvio Ramos called "financial mistakes."

The association "ended up with debt which they tried to wipe out by assessing the membership at the end of the year. Many members said better management of resources was the answer, not a hike in dues."

Despite growing membership and increased activities by the two other associations, Ramos said, ABEMD insisted on speaking for the Brazilian DM industry to the government and on foreign forums.

The origin of the dispute, informed sources said, was privacy. A group of associations got together to fund development of alternative privacy legislation to replace a more restrictive government draft.

"What happened," one source said, "was that with, not word to anyone, ABEMD sent the bill to the Brazilian Congress on its letterhead and claimed authorship, and understandably this annoyed everybody else." That and other infighting led Ramos to cancel Harte Hanks membership.

But the growth of three direct marketing associations in Brazil diluted the industry's overall clout and led to a meeting in June on formation of FEBAMDI. What made the matter more urgent was the question of Brazilian representation in a proposed Latin American federation of DMA's first proposed at the US DMA conference in Chicago in 1997.

The new group would be a regional version of IFDMA - the International Federation of Direct Marketing Associations - founded at the New Orleans meeting in 1996. ABEMD had signed the Chicago declaration but not much progress had been made in creating the new organization.

This year, however, the issue became more pressing - who should represent Brazil at the Latin American group?

An organizing meeting was scheduled for an IDBM-sponsored database marketing conference in Sao Paulo in May.

ABT and IDMA say they invited ABEMD to attend but that the older association did not show up and that they went ahead and founded the new group without them. Two seats on the board, Ramos said, are reserved for ABEMD.

Pio Borges, the head of DraftWorldwide in Brazil and long the power broker at ABEMD, an organization he headed until turning over the presidency to transportation executive Nelson Reid in 1997, saw things differently.

"We signed the IFDMA agreement in 1996 and we signed the document setting up the Latin American federation in 1997. Wilmar Munos, the president of IDBM, signed it, too, but more as a testimonial," Borges said.

He takes credit for suggesting that all three groups get together to form an integrated marketing association. "Then we were surprised because ABT and IDMA decided to form an association and although we gave them the idea we were not invited to be a part of it."

Borges then said that he had been invited to join later. He was holding back, he added, until he could check the rules of the new federation.

"We were given a package of decisions and an ultimatum - do you want to be in, yes or no," he said. "We should be respected. We were faced with something that had already been decided."

Even worse, from Borges point of view, was the new federation's unilateral decision to be the official Brazilian representative at the international organization. That proposal, he said, is designed to diminish ABEMD.

He disputed charges that ABEMD was slow to get on the Internet bandwagon, saying "We old hands recognize that DM is changing. The Internet is a reality. I have clients who have more than a hundred businesses on the Internet."

Borges also claimed credit for privacy initiatives, saying his group was discussing new, more "sensible" privacy legislation with members of the Brazilian Congress. "We have done good work through ABEMD."

The American DMA, which exercises great influence in Latin America, has also come in for attention. Borges was clearly annoyed that he had not been put on the US DMA board while Alejandro di Paulo, a power broker in the Argentine DMA, had been named to the US board.

The DMA's International VP, Charles Prescott, said the turmoil in Brazil was "serious and is unfortunate for the industry because it is at a critical time in its development.

"DM has reached critical mass and is at a point where it needs a professionally run center for developing skills, sharing experience and representing the industry with the policy makers.

"There is enough development in the industry to support two weak associations or one super all encompassing association. FEBAMDI is an effort to do that."

Despite the highly emotional nature of the current differences most observers believe the effort to form one umbrella organization will succeed, and probably before the US DMA's conference in Toronto in late October.